Has anyone worked for a hedge fund with AUM less than 25 million?

Water Cooler
#1

I am interested to know what your experience was like and what challenges you encountered in terms of operations, trading, etc.,

#2

Some posters NW here is over 25m, hopefully they will able to shed a light on how they manage their vast wealth

2 Likes
#3

Does that include their primary residence lol?

#4

The 25M “hedge fund” has 3 people, one guy is the investment/trade/sales team, other dude is back-office/accountant/legal, and the last person does random stuff… and sometimes it is just one person

#5

very likely 1. 25m. aint that just going to generate 250k in rev? thats getting split with 3 ppl and operational costs?

1 Like
#6

Often times, in small HF setups like that, the founder trades his personal money alongside perhaps a few anchor accounts, either seeders or friends/family type.

If the founder has $10m say, makes 10%, there is enough to pay for some support. So the positive is, in a good year, there can be ok upside.

That said, you have to be aware of the downside. So you won’t be able to do many trades, also probably will be smaller sizes. So you need a good information ratio. And the trading costs will be high if you trade OTC as you won’t have many counterparts, so you’ll get hammered on the bid-ask. Also the PB can make or break you, in case of volatility. And from a fundraising standpoint, its hard to grow as many investors need at least $300 aum to consider.

So that sort of setup depends a lot on the specifics.

1 Like
#7

Thanks for your well thought answer.